Breakfast News: Tesla Loses Ground Abroad
February 6, 2025
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Source: Image created by JesterAI.
1. Tesla Sales Fall in Europe's 3 Biggest EV Markets
Tesla (TSLA -3.58%) saw just 1,277 new cars registered in Germany in January, down 59% month over month and the lowest since July 2021 despite the country's electric vehicle market growing by 54% for the month. January sales in France slumped 63%, while U.K. sales slipped 12% to 1,458 cars, beaten by 1,614 sold by Chinese rival BYD.
- "If you value Tesla as just an auto company ... that's just the wrong framework": While the stock has seen remarkable gains thanks to its EV business – beating the S&P 500 by 18,040% since its first Rule Breakers recommendation in 2011 – investing is about what's ahead. Last year's quotes from CEO Elon Musk made it clear Tesla's future is all about "solving autonomy."
- "Significant investments in infrastructure": After raising AI spend by more than 400% in 2024, Tesla aims to launch its Robotaxi business in parts of the U.S. in 2025, though the company says growth will depend on advances in autonomy.
2. Next Up: Amazon Earnings
Amazon (AMZN -2.43%) will post fourth-quarter results after the closing bell. Management's guidance suggests $181.5 billion to $188.5 billion revenue. As the world's biggest cloud provider, much focus will be on Amazon Web Services (AWS) results.
- More Mag 7 AI spending growth?: Capital expenditure for 2024 is expected to hit $75 billion, and investors will be keen to hear of planned 2025 rises following similar announcements from Magnificent 7 peers in recent days.
- Prime Video advertising, and more: The company's Prime Big Deal Days event in October and ad revenue from the holiday shopping season should be significant contributors. Plus we'll want news of the tie-up with Anthropic, as well as new AI developments.
3. Qualcomm Falls Despite Earnings Beat
Wireless technology giant Qualcomm (QCOM 1.63%) posted earnings for the first quarter of 2025 after the market closed yesterday. Revenue of $11.67 billion beat expectations by 7%, with $3.41 adjusted EPS 15% ahead of analyst estimations. Revenue from Qualcomm CDMA Technologies (QCT) climbed 20% to $10.08 billion.
- Negative initial reaction: The stock fell around 5% in pre-market trading this morning, after Qualcomm said the expiry of an agreement with Huawei will mean no growth in its 5G patent licensing business this year.
- The importance of the Internet of Things: Looking ahead, investors should watch for growth in the automotive and IoT businesses, as management has a target of $22 billion in non-handset revenue by fiscal 2029.
4. What to Watch on Thursday Morning
Recommended twice in Stock Advisor in 2023 (both beating the market), gaming platform provider Roblox (RBLX 2.28%) will post Q4 earnings before this morning's opening bell.
- Record cash generation: A 120% rise in operating cash flow in the third quarter coupled with free cash flow soaring 266% have helped push Roblox up 92% in the past 12 months.
- Expect news of AI development in creation tools, safety systems, and developer productivity: This is the first quarter since the company launched its paid access experiences in December 2024, where developers get a 70% revenue share on premium-priced content.
5. Foolish Fun
Which of the following Foolish stocks, all down 60%+ since being recommended, has the best chance of recovering and beating the market over the next 5 years: Celsius (CELH -2.14%), Enphase Energy (ENPH -1.49%), Roku (ROKU 1.86%), or Under Armour (UA)? Debate with friends and family, or become a member to hear what your fellow Fools are saying.
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